Apple continues to target the market for high-end phones, even as demand accelerates for lower-cost models, particularly in emerging markets. But Apple is resisting the urge to release a truly low-cost phone that could crimp profitability.

Shares fell as much as 8.8% Tuesday morning.

Never mind the fact that Apple is a cash cow, or its overall numbers dwarf what most companies typically report. Wall Street is all about expectations, and Apple recently has been falling short of analysts’ lofty projections.

Wired may have put it best: “The only rule with Apple is: No matter how well it does, a whole different school of stock market physics seems to apply.”

Here’s a roundup of analyst reactions to Apple’s quarterly report:

Brian White, Cantor Fitzgerald: “Apple is down but not out — new product category and bigger buyback required. In our view, it was more clear than ever that Apple needs to introduce a new product category to return to healthier growth trends…Given another soft outlook from Apple, the generation of $22.7 billion in operating cash flow and trading at an unassuming 8.2x (ex-cash) our [calendar year 2015] EPS estimate (and even lower given the after-market trading in the shares), we believe Carl Icahn‘s push for a more aggressive share repurchase program could resonate with shareholders, and we expect his voice to become even louder in the coming weeks.”

Bill Choi, Janney Capital Markets: “The main problem was in the U.S. market, where the company faces a lengthening upgrade cycle, partly from changes to carrier plans, but more so due to the weak economy and its own relative lack of compelling product introductions. We believe trade-in programs were beneficial, but not enough to offset these headwinds. We see the lengthening cycle bottom in 6-9 months, and improving thereafter. We are reducing our estimates. Maintain Buy, lowering Fair Value to $560 (from $600).”

Chris Caso, Susquehanna Group: “Messier than we would have liked, but still playing for iPhone 6…We think the biggest issue concerning investors this morning is, however, revenue guidance, which is about $3 billion below consensus, and indicating a year-over-year decline. There are a lot of moving parts in these numbers, which is going to result in deep explanation by bulls, and worry by bears. Since we’ve seen such a dramatic mix shift in favor of iPhone 5S, we don’t think Apple is suffering from the same problem as last year and remain comfortable with demand – but we expect a wide range of opinions this morning. Despite all the hand wringing that will ensue, however, our estimates don’t change for fiscal 2014, and the iPhone 6 catalyst (the reason we wish to own the stock) still lies ahead.”

Mark Moskowitz, J.P. Morgan Chase: “We recommend investors take advantage of any near-term weakness. We think investor sentiment will be bruised by the slowing iPhone momentum and indications the company misread market conditions with its rollout of the iPhone 5C among other factors. We think the issues are explainable and can be overcome, though. For Apple, we are still modeling above-peer revenue growth and free cash flow for 2014. Both pillars are important to our relative stock assessment approach, hence, the Overweight.”

Abhey Lamba, Mizuho Securities: “The company’s results underscore the challenges facing the high end of the smart phone market whereby Apple is likely to remain growth challenged in the near term. In the meantime, the company has ~$157 in net cash/share or 31% of its market cap is in cash. As such, we expect activist shareholders to take on an even more vocal role and pressure management to increase its buybacks and dividends. Management usually updates its capital allocation decisions at the end of March quarter.”

MoneyBeaters, what do you make of Apple’s report? Are you buying the dips, or will the stock continue to struggle? Drop your thoughts in the comment section below and let us know what you think!